Blockchain used to be synonymous with Bitcoin. Well, to the average person it probably still is the same thing. But this technology that we’re all hearing about—blockchain—is so much bigger than Bitcoin. Its potential to automate, decentralize and democratize operations in any sector is almost limitless. Blockchain's unique advantage is trust. Existing networks rely on a central authority—the utility, independent energy service providers, the bank, the credit rating agency—to establish and transmit trust. Blockchain applications allow for decentralized trust, where verification comes from the consensus of multiple users. In the electricity sector, blockchain technology is promising to introduce data and automation to enable the movement toward much deeper decentralization and digitization of the electricity grid not to mention the democratization of the grid. Blockchain wants to give the power to the consumer (i.e. democratization)!
The grid which we utilize today to power our homes was designed more than a century ago. This century-old grid was designed to take centralized power located far away from load centers and deliver it to our homes and businesses. Big utilities had big power plants and used their long transmission lines to ensure that when you turned on your switch there was light. The consumer in this model is a captive ratepayer—unable to make decisions beyond paying the monthly bill and without timely information to change behavior or understand the impact of his/her consumption. For the past two or three decades, because of new technologies and new policies and the ever-increasing threat of climate change, we have an opportunity to re-think the way the grid is designed and the way it generates power and delivers power. We also have an opportunity to turn captive ratepayers into active consumers in charge of their own energy decisions.